The stock market cratered Thursday as fears of global economic slowdown driven by President Trump's new tariffs spurred Wall Street's worst day of losses since the outbreak of the COVID-19 pandemic.
The Dow Jones Industrial Average fell more than 1,679 points Thursday, closing with a loss of 4 percent. The S&P 500 index plunged 4.8 percent, and the Nasdaq composite sunk 6 percent on the day.
The Dow and S&P each suffered their worst day of losses since June 2020, while the Nasdaq took its heaviest single-day hit since March 2020.
While the scale of the day's losses is partly due to the stock market's rapid growth since 2020, Thursday marked a new low for Wall Street after months of growing concern about Trump's trade agenda.
"The Trump administration may be playing a game of chicken with trading partners, but market participants aren’t willing to wait around for the results. Instead, investors are selling first and asking questions later," Michael Arone, chief investment strategist at State Street Global Advisors, said in a Thursday analysis.
Stocks have fallen steadily throughout the year as Trump ramped up his trade war — first with tariffs on Canadian, Mexican and Chinese goods, then on foreign steel and aluminum. The president announced last month he would also impose tariffs on foreign autos and car parts.
But the sell-off escalated Wednesday in after-hours trading as Trump unveiled roughly $600 billion in new import taxes.
Trump and his economic team sought to dispel concerns Thursday, insisting the tariff rollout was going along as planned and that the U.S. would benefit after some short-term pain.
Speaking to reporters Thursday before flying to his Miami resort, Trump compared the new import taxes to recovery from surgery.
“It was an operation, like when a patient gets operated on, and it’s a big thing. I said this would exactly be the way it is. We have $6 [trillion] or $7 trillion coming into our country," Trump said.
Most economists estimate his new tariffs will generate up to $600 billion in revenue, though experts warn tariffs of this magnitude are hard to analyze with certainty.
“The markets are going to boom, the stock is going to boom, the country is going to boom. And the rest of the world wants to see if there’s any way they can make a deal,” Trump said.
Trump administration officials have given mixed messages about whether the White House would be open to deals to loosen the new tariffs.
Commerce Secretary Howard Lutnick offered conflicting guidance Thursday, insisting Trump wouldn’t “back off” his tariffs but would also be open to deals.
“This stuff has got to stop. America has got to stop being exploited, and you’re going to see America prosper. And then, and only then, will Donald Trump make a deal with each country when they’ve really, really changed their ways,” Lutnick said.
“That’s not back off. That is, let the dealmaker make his deals when, and only if, these countries can change ...
